USDi stablecoin pitches inflation-linked hedging as oil shock revives inflation trade

Oil prices jumped after the Iran war and the risk of disruption at the Strait of Hormuz, pushing U.S. investors back to inflation concerns. April data noted headline inflation rising (0.9% in the latest month, with energy a key driver) while core inflation fell short of expectations. Michael Ashton, co-founder of the USDi stablecoin with Andrew Fately, argues the stablecoin boom has only fixed crypto’s payments use case, not its store-of-value problem. In his view, most dollar-pegged stablecoins are designed for nominal $1 value, so they can lose purchasing power in real terms—creating an “inflation risk” for treasurers and payment platforms holding stablecoin float. The USDi stablecoin is positioned as an inflation-linked token that rises with changes in the U.S. CPI, aiming to resemble an on-chain version of inflation-protected principal rather than a nominal-dollar peg. Its reserves are invested via the Enduring U.S. Inflation Tracking Fund, which uses TIPS, U.S. Treasury instruments, FX, and commodity derivatives to generate returns. Ashton contrasts this approach with TIPS’ market-price sensitivity to rate moves. Beyond CPI tracking, the USDi stablecoin plan includes customizable inflation exposure—potentially isolating health-care, tuition, energy, or even geography-specific inflation components. Ashton highlights insurers as likely early adopters because they face hard-to-hedge inflation risk in medical costs. USDi is already live and targeting a seed raise of about $1.5M. Ashton frames the product as a structural completion of crypto’s monetary system: stablecoins handled payments; now the store-of-value layer needs to be solved.